HONG KONG: Corporate investor convicted for Hong Kong short selling breaches

Thursday September 5 2013

The Eastern Magistrates’ Court has convicted Premium Stars Investments Limited after it pleaded guilty to one count of illegal Hong Kong short selling in the shares of China Properties Investments Holdings Limited.

Premium Stars was fined $3,000 and ordered to pay investigation costs to the Securities and Futures Commission.

An SFC investigation found that, on 3 May 2011, Premium Stars sold 68,000,000 excess rights shares to be issued by China Properties after it had applied for them. However, Premium Stars sold the shares before it received confirmation of the allocation and quantity of excess rights shares.

As a result, Premium Stars committed illegal short selling contrary to section 170 of the Securities and Futures Ordinance because, at the time of selling, it did not have reasonable grounds to believe that it had a presently exercisable and unconditional right to sell the shares.

Click on the above link for the press release.